Business owners and executives increasingly understand the importance of employee engagement. This makes perfect sense because you typically associate engagement with retention and productivity.

At the same time, however, many employers have yet to realize the pivotal role employee happiness plays in the workplace. More specifically, they don’t understand that it's virtually impossible to expect employees to be engaged if they’re not happy in the first place.

Yes, there can be happy employees who are simply not engaged and therefore not productive. Think of the happy-go-lucky fellow who considers work an eight-hour block designed for socialization.

But it’s impossible for an employee to reach their full potential if they are miserable every time they step foot in the office. Think about it. You’ve almost certainly had a job you hated at one point or another. Sure, you might have powered through and got a ton of work done — that’s how you roll. But how much more productive would you have been in that position if you were happy? At the very least, you wouldn’t have spent a ton of time thinking about how much you hated your job. And those hours could have been reinvested in more productive work activities.

Before we dive into how, specifically, happy employees benefit companies, let’s take a look at some employee happiness stats compiled by the folks over at SnackNation:

Companies with happy employees outperform their competitors by 20%

Happy salespeople generate 37% more sales than their depressed peers

36% of employees would sacrifice $5,000 of salary to be happier at work

Now that you see the importance of employee happiness, let’s dig a little deeper to reinforce the point.

Happy Employees Are More Likely to Stick Around

The importance of employee happiness extends beyond mere anecdotal evidence. According to a recent study by Growth Engineering, happy employees are not only more productive, they’re less likely to be absent from work. They’re also 10% more engaged and 40% more likely to be promoted.

As millennials come to dominate the workforce, that last statistic is one that can’t be overlooked. More so than simple salaries, millennial employees — who will represent 50% of the global workforce by 2020, according to PricewaterhouseCoopers — are driven by opportunities for professional growth, development, and advancement. In other words, when your employees are happy, they’re more likely to move up the ladder, which means they’re less likely to look for another job — particularly when they are millennials.

Happy Employees Perform Better Across the Board

According to research cited by the Harvard Business Review, when employees approach their jobs with a positive mindset — something you’d imagine is nearly impossible for unhappy workers — performance across the board improves. Not only are happy employees more engaged and more productive, they’re also more creative.

So in addition to companies benefitting from increased high-quality output, they also are able to tap into the brilliant minds of their employees. That creativity may very well result in new products or service offerings, new and more efficient procedures, or new collaborative processes.

Happy Employees Help Sustain a Great Work Culture

If you had a choice, would you rather be around someone who’s happy or someone who’s miserable? Unless you’re a masochist, you’d probably choose the former and for good reason.

A 2008 study from Harvard Medical School revealed that just like the flu or the common cold, happiness can be contagious. “Just as some diseases are contagious, we’ve found that many emotions can pulse through social networks,” said Nicholas Christakis, a professor at HMS.

According to our Employee Engagement Report, work culture is strongly correlated with employee happiness. For our purposes, this means two things:

When employees fit in with their company’s culture, they’re more likely to be happier.

Because happiness is contagious, happier employees are more likely to rub off on one another, which in turn helps sustain the company culture that business owners have worked so hard to build.

On the other hand, companies filled with unhappy employees will have a tremendously difficult time maintaining their work cultures — which could result in accelerated turnover and a reduced bottom line.

How to Increase Employee Happiness

Now that you’re aware of all the ways employee happiness benefits your business, here are some ideas you can implement to increase the chances your employees are smiling more often than not:

Give Your Employees Free Food

You may laugh and brush this one off, but according to a recent USA Today article, 67% of employees who have constant access to free food consider themselves either “extremely” or “very” happy in their current roles.

You can’t expect your employees to produce at their highest abilities on an empty stomach. Offering free food not only increases happiness and healthiness, it can also be used to attract top talent. It’s a worthwhile investment.

Invest in Team-Building Exercises

A recent Gallup report contains two very interesting nuggets of information. First, when workers make friends with their coworkers, employee satisfaction is boosted by 50%. Second, employees who have a best friend at work are seven times as likely to be fully engaged. In this light, employers should do everything they can to foster these kinds of relationships. Team-building activities, which “force” people to interact with one another, can be used to accomplish this goal.

Offer Professional Development Ppportunities

As discussed above, happier employees are more likely to be promoted. But it’s not like you can promote every single one of your workers. That’s OK. According to our Employee Engagement Report, only 25% of workers feel as though there are adequate opportunities for professional development offered by their employers. Make professional development a top priority for your organization, and your employees will be happier.

Employee happiness is not the same thing as employee engagement. But employees cannot be fully engaged unless they are happy in the first place. With all this considered, it should be easier for you to sell the importance of the word “happiness” at your organization.